THE FOUNDER of one of the world’s biggest file-sharing sites has been denied bail by a court in New Zealand as he awaits an extradition hearing.

Kim Dotcom (formerly Schmitz) is being investigated by the FBI and the US Department of Justice over claims his site earned money from pirated material. He is also accused of conspiracy to commit money laundering.

The FBI said in a statement that it believes the MegaUpload “and other related sites” caused over half a billion dollars in harm to copyright owners while generating around $175 million in criminal proceedings.

Dotcom denies any wrongdoing.

The US is seeking his extradition from New Zealand, where he was arrested with three other people last week.

As a result of US action against the site, both MegaUpload and MegaVideo have been shut down. The latter site allowed viewers in Ireland to watch TV shows which would not normally air here for months after they aired in the US – if at all.

MegaUpload had around 150 million users.

The New Zealand Herald reports that the site founder has launched an appeal against the bail decision. Delivering his decision, Judge David McNaughton said he considered Dotcom, a German citizen, a serious flight risk and denied bail. His lawyer said Dotcom was disappointed with the result and denies being involved in what the FBI has termed a “mega conspiracy”.

He has been remanded in custody until 22 February. The extradition papers are expected to be filed by that date.  The three other men who were arrested are to have their bail hearings tomorrow.

The FBI has indicted seven people, including the four being held in New Zealand, in connection with alleged piracy.

Read: Less free TV as MegaUpload (and MegaVideo) shut down >

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